The Balkan country of Bulgaria seized over 213,500 Bitcoin back in 2017 and sold them the following year; now, that would be more than enough to cover the country’s public debt.
When Bulgaria seized 213,519 Bitcoin (BTC) in late 2017, the haul was worth around $3.5 billion — enough to cover a fifth of the country’s national debt. The government sold the Bitcoin soon after the seizure — but some speculate that despite official denial the government may still hold the assets.
Now, the same amount of Bitcoin would be worth about $25.24 billion. This exceeds the country’s public debt of $24 billion, according to World Economics data.
This data might lead readers to believe Bulgaria played its cards incorrectly, but hindsight is 20/20. Founder of Obchakevich Research, Alex Obchakevich, told Cointelegraph that “Bitcoin's volatility makes it difficult to use it as a stable reserve.”
Robert Znidar, director at crypto asset management platform Iconomi, was more critical of the decision. According to him, the sale was motivated by “unfamiliarity of the philosophy, utility and mission of BTC.” He added:
“Considering the recognition that BTC and crypto have received in the last year, I am sure that this would not happen again.“
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Long-term holding of Bitcoin is a reasonable strategy
Obchakevich said the potential benefits of holding on to Bitcoin would be “overshadowed by the risks of a sharp drop in value.” Instead of holding it as a reserve, he suggests that the country should have diversified its holdings.
“Limiting the share of Bitcoin to about 10-15%, phased liquidation, hedging through derivatives, and a clear legal framework to avoid macroeconomic instability are necessary,” he explained. Valentin Mihov, co-CEO at Web3 market maker Enflux and a Bulgarian, is not as convinced that his government made the right call.
According to Mihov, the story “reflects how most governments still misunderstand what crypto can be: not just a speculative asset, but a strategic reserve opportunity.” He said that at the time, “most institutions still saw Bitcoin as radioactive, if they even knew about it,” so that played a significant role in the decision to sell, but was far from the only reason:
“Custody was immature. Regulation was uncertain. The EU was tightening fiscal discipline, and there was less appetite for risk. From a conservative government’s point of view, liquidating the seized BTC was the cleanest path forward.“
Mihov said that if he had been advising the Bulgarian government at the time, he likely would have recommended a partial liquidation. However, he added, “I would’ve argued for a long-term reserve structure.”
“Even a 10 or 20% strategic hold would’ve positioned Bulgaria ahead of the curve,” he highlighted.
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Major nations continue to hold Bitcoin
According to a recent review, governments collectively hold about 463,000 BTC, about 2.3% of Bitcoin’s total supply. The two top holders are the United States and China, with Bitcoin Treasurys data showing that they hold over 198,000 BTC and exactly 190,000 BTC, respectively.
The United Kingdom is third, holding 61,245 BTC, followed by Ukraine, which includes public officials’ holdings, at 46,351 BTC. The fifth top holder is North Korea, which largely acquired Bitcoin through the activities of state-sponsored hacking groups, currently holding 13,562 BTC.
Bhutan is the sixth-largest holder of Bitcoin among countries, with its 10,486 BTC. The government often makes headlines with its Bitcoin transactions, with a July 14 report noting that it transferred $74 million in Bitcoin to Binance over two weeks.
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